Australian organisations face significant change for the 30 June 2022 reporting season, with the introduction of the Simplified Disclosure reporting framework and removal of the reporting entity concept for private for-profit entities.
Over the last few years, the Australian Accounting Standards Board (AASB) has fundamentally shifted the financial reporting framework in Australia, the impacts of which are mandatorily applicable for the first time for years beginning on or after 1 July 2021 (30 June 2022 year-ends).
These changes see two fundamental shifts in the Australian Financial Reporting Regulatory Landscape:
- The Removal of the 'reporting entity' concept for private for-profit entities, and a new framework for determining who can prepare Tier 1 or Tier 2 General Purpose Financial Statements (GPFS) and who can prepare Special Purpose Financial Statements (SPFS).
- The replacement of the Reduced Disclosure Regime (RDR) for all Tier 2 GPFS with the new Simplified Disclosures (SDS) framework for all organisations both for-profit and not-for-profit.
The result of these changes is that there will be fewer organisations that can prepare SPFS as more will be captured in the GPFS requirements.
For those organisations there is likely to be a significant increase in disclosure requirements as they move to GPFS (SDS) and potentially recognition and measurement implications as Tier 2 GPFS must comply with all recognition and measurement requirements of Australian Accounting Standards (AAS).
For organisations who were previously reporting under the RDR regime, they are likely to see a decrease in the level of their disclosures as they adopt the SDS requirements.
Moore Australia's guide to transitioning to Simplified Disclosure Reporting has been designed to assist you in determining what type of financial statements you organisation is required to prepare for years beginning on or after 1 July 2021 (30 June 2022 year-ends onwards) and how to approach the transition for common transition scenarios.
If you require any assistance don't hesitate to contact your local Moore Australia office today. Our experts are available to assist you in navigating these changes and ensure you are ready for the new reporting frameworks.
This article is issued as general commentary - please contact us about your specific circumstances.